Licensing artwork can benefit your career by placing your artwork in front of more viewers and by providing extra income. It’s a mutually beneficial collaboration between an artist and an separate entity, achieved through a written contract. Licensing artwork means making art collections that manufactures and companies can print on their products. This includes greeting cards, merchandise, murals, art prints, home products, clothes, etc. – things that will help your designs become apart of other’s everyday lives.
What Does Licensing Mean?
Licensing artwork is like renting your work out. Licensing agreements can be described as a contract or strategy that is used for marketing and brand extension that is widely used for businesses. Entertainment, sports, universities, cities, fashion and museums are areas that may license artwork. You can maintain the right to license the same exact artwork to several companies at one time if it’s a non-exclusive agreement. For example, one company may print your work on wall art and a completely separate company may decide to print your artwork on bed sheets. Licensing is all about leasing your intellectual property or copyright entity in conjunction with products, services or promotions. The artwork can be a logo, sketch, slogan, image, design or brand that another company has permission to use within a certain territory and duration.
In the contract you can choose to maintain recognition and include your signature on the artwork or you can choose to abide to a contract that requires you be a private label and remain anonymous so that the company that you’re working with can place their branding on the product. The licensor is the brand owner that is providing the creativity and the mood for the project and the licensee is the one that is taking care of the execution of the strategy that will get your work out to the public.
An Overview Of Licensing History
The history of licensing was born in France in the 1950s to support the extension of new fashion and luxury products in brands such as Chanel and Dior. In the 1970’s licensing was introduced to Italy to help young designers develop and market their collections. The Armani brand was one of the first to establish a model licensing agreement globally and it spread into the entertainment business in America with Disney products. Licensing artwork allows the customer to be able to have options for expressing their personality.
Building Connections To License Artwork
Trade shows and building in-person relationships are the most common ways to find companies that are interested in licensing artwork. Artists can also hire an agency that will license their work to a manufacturer. Also, a lot of products have a sticker on it (such as on the bottom of a cup) with the manufacturer’s name so that you can search the internet for their contact info to ask if they are accepting new artist submissions. The best way to communicate with companies that are looking for creative ideas is to start by visiting their website to see if they have a submitting form for sending in your artwork. Visiting the manufacturer’s website will to show that you’ve researched them and that you’re familiar with their company and that you can follow their directions. If they don’t have a section of their website for submitting art, try using their contact page to reach out. Take your time before following up again. Figure out if it’s worth pursuing a manufacturing company. Choose a company that is making sure that their products are in front of the consumers that you’d like to reach as an artist.
Social media is also a great way to build new connections and be a genuine source of friendship and value. Oftentimes, a well curated instagram account will lead companies into reaching out to artist for a potential collaboration. Artists can become brand influencers because audiences engage more when they can relate to a person, image or narrative.
How To Price Artwork For Licensing?
Pricing your artwork for licensing can range. An average percentage licensing fee for consumer products that can be found in Target, Ikea or Bed Bath and Beyond can fall between 3 to 7 percent of the wholesale price in royalties. Upfront cash for signing a licensing deal is rare, however it happens when the artist has invested in building a brand, has expertise and connections, is promoting the artwork independently or has molds because once you have perceived value then you have leverage. Ask how many units the manufactory believes they can sell and negotiate how much money you’d like to receive per item sold. For example, if the licensee believes that they can sell 2,500 units, and you’re making $0.25 per unit sold, that gives you the potential to make $625 which is not a lot of money, however it’s a start. There’s a lot of networking behind gaining several substantial licensing deals that can provide passive income.
You can offer companies the following incentive to continue using your artwork as they grow: If they spend over a couple thousand dollars reproducing your artwork, then you can ask for a lower royalty percentage of let’s say 5 percent so that they can save money by investing in more products with your art on it, however if they only invest a few products with your art printed on it, then you can ask for a higher royalty of let’s say 17% so that the deal is still worth your time. If it’s a small business and they only want to print your artwork once, on let’s say on one canvas inside of an interior designer’s showroom, you can agree to a flat rate to license your artwork and ask for credit as the artist. There is no standard way to price a licensing agreement for your artwork and there are many ways that compensation can be distributed. Licensing artwork can be a flat fee arrangement or you can negotiate a percentage of royalties if you’d like residual income, however the royalties are usually small unless you are a well known artist with a large body of work.
You’re doing well if you are making a living of $40K to $100K a year from licensing artwork, however this is not super easy money because you’ll still need to remain a productive artist, continuously producing new works for your clients to choose from. You can look at licensing artwork as a form of collaboration between what the market trends are, what the artist feels like creating and what the manufacture is willing to produce.
What Should Be On A Contract When Licensing Artwork?
You might be able to start with a boilerplate contract for licensing artwork and alter it to suit your art business. I advise artists to seek counsel from an attorney, especially if you think this licensing deal will greatly effect your business and livelihood. It is important to learn about the industry and be able to decipher a contract on your own as well. A contract should include how long (time) the contract should last, where the client is going to sell the products, the ability to audit the manufacturer’s books, what the products are and what artworks you’re providing. Depending on how you’re building your art business, some elements on the contract are more important than other. It’s important to be able to negotiate a contract.
You can add value to your value to your licensing deal by slowing it down and breaking it apart by exclusive deal vs non exclusive deal, global or local, how many stores the product will be in and what the wholesale price will be: this will help you better determine what potential income is. Remember, you do not have to take the first offer that is sent to you because you can always go to another company if they are not giving you the value that you’d like. You can negotiate with companies and say that they have to sell X amount of product to have an exclusive licensing agreement, otherwise you’d like to ability to sell your artwork on your own as well. If a company does not agree to minimum guarantees you can ask them what other performance clause you can add to the contract. You don’t want to sell your business unless there are reasonable minimum guarantees.
How Long Does The Licensing Process Take?
It takes a while to make money from art licensing. The cash flow cycle requires planning ahead. After the artwork is created, the manufacturing company will make sure they have a decent place to sell your work before they commit to you. Then a contract will be drafted, the artwork is formatted digitally and produced, shipped, and sold. Licensers will often get paid quarterly, and it can take up to 9 months from the very start of a project for an artist to see their first check.
Instead of flat out selling your art, you have the potential to maintain the rights to the original work of art and instead sell copies of your images on products. Never be afraid to ask a company about licensing your artwork. Stay creative and pitch a deal that works for both your client and you!